The head of the Central Intelligence Agency offered a sobering view Thursday of the Islamic State’s capabilities, saying that despite setbacks the jihadist group will likely intensify its global terrorist campaign in the months ahead.

CIA Director John Brennan, in testimony before the Senate Intelligence Committee, said the Islamic State, also known as ISIL and ISIS, remains a potent force in Iraq and Syria and remains capable of striking countries far from its base in the Middle East, nearly two years after the start of the U.S.-led military campaign aimed at defeating the group.

“Despite all of our progress against ISIL on the battlefield and in the financial realm, our efforts have not reduced the group’s terrorism capability and global reach,” Brennan told the Senate panel. “The resources needed for terrorism are very modest, and the group would have to suffer even heavier losses on territory, manpower and money for its terrorist capacity to decline significantly.”

Brennan’s comments contrasted with a more positive assessment given on Tuesday by President Obama, who touted the progress in reducing the terrorist group’s territorial holdings and drying up its financing. Obama credited the ongoing military campaign with cutting the Islamic State’s Iraqi territory by about half.

The CIA director acknowledged the battlefield setbacks as one of several positive trends in the fight against the jihadists.

“Its finance and media operations have been squeezed, and it has struggled to replenish the ranks of its fighters — in part because fewer foreign fighters are now able to travel to Syria,” he said. Moreover, he said, there is fresh evidence of declining morale within the group, as more senior leaders are killed and more ordinary fighters defect or seek to return home. Regional affiliates are struggling to gain traction because of fighting with other militant groups, he said.

Yet, partly because of these pressures at home, the Islamic State is expected to step up attacks abroad, he said.

“We judge that it will intensify its global terror campaign to maintain its dominance of the global terrorism agenda,” Brennan said in his testimony. A two-year effort to plan and direct foreign terrorist attacks has yielded fruit, most prominently with the terrorist strikes on Paris and Brussels, both of which are believed to have been coordinated by the Islamic State’s leaders, he said.

“We judge that ISIL is training and attempting to deploy operatives for further attacks,” said Brennan. “ISIL has large cadres of Western fighters who could potentially serve as operatives for attacks in the West. And the group is probably exploring a variety of means for infiltrating operatives into the West, including in refugee flows, smuggling routes and legitimate methods of travel.”

The recent attacks in Orlando and San Bernardino, meanwhile, are proof of the group’s ability to “inspire attacks by sympathizers who have no direct links,” he added.

Brennan said his agency had not discovered any direct ties between the Islamic State and Omar Mateen, the gunman who killed 49 people early Sunday in an Orlando gay nightclub. But he said self-radicalized young men such as Mateen represent a particularly difficult problem for the United States.

“These so-called lone wolves, the ones who operate as a result of the incitement, encouragement and exhortations of these terrorist organizations – this is an exceptionally challenging issue for the intelligence community, security and law enforcement to deal with,” he said.

In his remarks on Tuesday, Obama had focused on the progress made in the fight against the Islamic State, though he acknowledged it was “a difficult fight.” U.S. and allied aircraft have conducted 13,000 airstrikes against the terrorist group. Among those killed were the Islamic State’s senior military commanders in the Iraqi cities of Mosul and Fallujah and the senior leader in Iraq’s Anbar Province.